{"id":2732,"date":"2021-09-23T14:50:59","date_gmt":"2021-09-23T19:50:59","guid":{"rendered":"https:\/\/www.northone.com\/blog\/?p=2732"},"modified":"2023-06-26T14:34:50","modified_gmt":"2023-06-26T19:34:50","slug":"ach-withdrawal","status":"publish","type":"post","link":"https:\/\/www.northone.com\/blog\/business-banking\/ach-withdrawal","title":{"rendered":"What is an ACH Withdrawal? (And How to Cancel Them)"},"content":{"rendered":"\n

Even if you\u2019ve never heard of ACH before, chances are, you\u2019ve probably used it. But what is an ACH payment<\/a>, and how exactly does it work? Short for \u201cAutomated Clearing House,\u201d ACH is an electronic network that handles payments between banks. If you\u2019ve ever received direct deposit to your checking account from an employer, that\u2019s ACH deposit. If you\u2019ve set up your utility bills to come right out of your account, that\u2019s an ACH withdrawal.<\/p>\n\n\n\n

As a personal user, when you send money to friends or family using any number of third-party apps such as Zelle, Venmo, or PayPal, these typically use ACH.<\/p>\n\n\n\n

For a business, using ACH can be a great way of simplifying the transfer of money: setting up automated payments means you don\u2019t have to chase down invoices or handle checks, cash, credit cards, or wire transfers.<\/p>\n\n\n\n

<\/span>What is an ACH withdrawal?<\/strong><\/span><\/h2>\n\n\n\n

An ACH withdrawal is an electronic fund transfer where money is taken out of one financial account and deposited into another using the Automated Clearing House (ACH) Network. It\u2019s an easy way of transferring funds in the USA, even if the sender and receiver are with different banks. It may sound very similar to a wire transfer, but there are some key differences between ACH vs. wire transfers<\/a>, which we\u2019ll address below.<\/p>\n\n\n\n

With authorization, funds get taken out of the sender\u2019s account, batched with other payments through the ACH network for processing, and then, after being cleared, are deposited into the receiver\u2019s account. The ACH Network is managed by the National Automated Clearing House Association (NACHA), which is a nonprofit made up of multiple regional payment associations. They create and enforce the rules for ACH withdrawals and transfers.<\/p>\n\n\n\n

<\/span>How does an ACH withdrawal work?<\/strong><\/span><\/h2>\n\n\n\n

Let\u2019s say you\u2019re a small business owner accepting payment for your products and\/or services. Instead of chasing down invoices, you might prefer to withdraw funds directly from your customers\u2019 accounts. This is especially convenient if the transaction is recurring, such as a monthly bill.<\/p>\n\n\n\n

Here\u2019s how an ACH withdrawal works:<\/p>\n\n\n\n